When your car insurance claim is approved

What can you expect in settlement if your car accident insurance claim is approved? Part of the answer depends on whose insurance you are pursuing. If your claim is with your own insurance company, that is called a first party claim. If your claim is with the other driver’s insurance, it is called a third party claim. (See Auto Accident Insurance Claims: Making a Claim for Personal Injury & Property Damage with Your Own or Another Person’s Insurance Company.)

First Party Claim – A claim with your own insurance company

When you have filed a claim with your own insurance company for physical damage to your vehicle from a car accident (Collision Claim); from vandalism or another type of event under the comprehensive section of your policy (Comprehensive Claim); or for injuries sustained in a crash (Medical Payments Claim, or Med Pay); and if there are no problems with your coverage, your claim should be approved and paid. For collision or comprehensive damage, most insurers will pay the body or glass shop where you have your car repaired directly after they receive an estimate from the shop. Occasionally, although this doesn’t happen much any more, an adjuster will come to your home or work, write an estimate for the damage him or herself, and hand you a check right then and there to cover it.

If you have rental car coverage on your policy and your car must be in the shop for several days or weeks, the insurer will either arrange for a rental car for you with a company with whom they have a relationship, or tell you whom to call. There is usually a daily or weekly dollar limit and the insurer will pay the rental car company directly.

Some people use their own health insurance to cover medical bills resulting from a car accident injury claim, even though they have Medical Payments coverage with their auto insurer. Read your auto policy to determine which coverage is primary and how your insurer handles it if you have double coverage. Although you are entitled to receive payment from your Med Pay coverage on your auto insurance policy, some insurance companies may choose to subrogate against (legally request reimbursement from) your health insurer if your health insurance is primary. Other companies will just pay you directly for your bills, even if they were already covered by your health insurance, and you can keep that money. Your policy will only cover you for reasonable and necessary treatment, and only for an amount that is within your policy limits.

Third Party Claim – A claim with the other driver’s insurance company

When you are in an accident with another driver and it is at least partially their fault, and you are not in a no-fault state, you may make a claim with the other driver’s insurance company. For a Property Damage claim, similar to your own insurer, the other insurer will typically pay the body shop directly for repairs once they receive an estimate from the shop. The other driver’s insurance will also pay for your rental car for a reasonable and necessary amount of time during which your car is being repaired.

If your car was totaled, (it would cost more to repair it than its value) they will pay you the ACV (Actual Cash Value) of the vehicle and take the salvage and sell it, keeping the profit, or, offer you the salvage (your damaged vehicle) and the ACV less the salvage value. An agreement on the ACV must be reached in order to settle this type of claim. (See What Your Options Are When Your Car is Totaled.)

If you are injured and making a Bodily Injury claim with the other driver’s insurance company, there are no hard and fast rules regarding settlement. If you are offered a settlement amount that you believe is fair and you want to take it, you will be asked to sign a Release and Waiver, which waives your right to come back and sue for more money from them or their insured at a later time, even if you learn new information about your injury. (See Your Car Insurance Settlement Agreement.) It is always good practice to have an attorney look at the documents before you sign them. Better still, if you have anything more serious than a very minor injury, it is best to have an attorney represent you so you know you are being dealt with fairly.

If you are on your own and cannot reach a settlement, you may:


* Contact an attorney to negotiate for you unless time is of the essence (Check the Statute of Limitations in your state) in which case you may need that attorney to file suit to protect your rights.

* Contact a car accident attorney to file suit against the responsible party (especially if time is an issue).

* In some states, you may file suit and/or file a complaint with the Department of Insurance for Third Party Bad Faith. (At the time of this writing, those states are Alabama, Hawaii, Michigan, New Hampshire, Florida, Louisiana and Nebraska.) Check with an attorney in your state who specializes in bad faith cases.